HEG Expects Healthy Q4 As Export Duty On Graphite Electrodes Remains On Paper

Bloomberg –  February 8, 2018

Graphite electrodes manufacturer HEG Ltd. expects fourth quarter earnings to remain healthy after returning to black in the October-December period.

An up to 20 percent duty on exports of graphite electrodes introduced in the Union Budget 2018 has not yet been implemented, Ravi Jhunjunwala, chairman of HEG told BloombergQuint in an interview. Besides, the company will benefit from strong demand and pricing, he added.

While there is no export duty on graphite electrodes as of now, the Budget proposal allows the government to check on exports by imposing a tariff of up to 20 percent.

“We are exporting two-third of our production for the last 20-25 years,” Jhunjunwala said, questioning the government’s decision to impose an export duty. “The rest one-third is total demand of this country. So what is anybody going to achieve by putting in export duty? Spare capacity which we have created over the last 30 years has to be exported.”

Party Far From Over as Graphite Maker’s Gains Exceed Bitcoin

Bloomberg –  January 18, 2018

A staggering rally in the shares of Indian graphite electrode producer HEG Ltd. shows no sign of losing steam as global shortages persist amid increasing demand from European steelmakers.

A cut in electrode production capacity in the past few years and a dearth of needle coke, the raw material used to make them, have reduced supplies, while a slump in Chinese steel exports has encouraged world mills to boost output from electric arc furnaces, which use electrodes to process scrap into metal.

Capacity additions are unlikely in the next two to three years at a time when demand for steel from electric arc furnaces is reviving because the world is becoming more aware of the impact of pollution from blast furnace technology, according to India Ratings & Research, the local arm of Fitch Ratings.

HEG climbed a massive 1,412 percent in Mumbai to 2,784.45 rupees ($44) in the past year, while Indian peer Graphite India Ltd. jumped 709 percent to 788.90 rupees. The gain in HEG far exceeded the 1,109 percent increase in Bitcoin over the same period. The benchmark S&P BSE Sensex Index was up just 29 percent.

HEG hits new high on steller Q2 performance; stock zooms 1127% in 2017

Business Standard – November 3, 2017

The stock locked in upper circuit of 5% at Rs 1,841, also its new high on the BSE, after the company reported net profit of Rs 114 crore in Q2 against loss of Rs 14 crore in year ago quarter.

HEG was locked in upper circuit of 5% at Rs 1,841, also its new high on the BSE, after the company reported stellar performance in September 2017 (Q2FY18) with net profit Rs 114 crore. The company, a leading graphite electrode manufacturer in India, had recorded a net loss of Rs 14 crore in a year ago quarter. It had posted loss of Rs 50 crore in the entire previous financial year 2016-17.

Shares Of Graphite Electrode Makers Decline As Prices Fall In China

Bloomberg –  November 15, 2017

Shares of Graphite India Ltd. and HEG Ltd. fell from their all-time highs today as the prices of graphite electrodes, used in steel production, continue to decline.

The two companies that account for about a quarter of global capacity fell 5 percent each. The stocks gained more than 400 percent so far this year as graphite electrode prices hit a record in August on a global supply crunch.

That changed this month. China’s benchmark graphite electrode prices fell 6 percent to $10,603 a metric tonne on Wednesday, according to Bloomberg data. It’s down over 30 percent so far in November.

Graphite electrodes are highly conductive and can sustain extremely high levels of heat during steel production—a reason why they are used in electric arc furnaces. Prices scaled $16,000 a metric tonne after China’s curbs on pollution hurt supply of needle coke, a key raw material. That came even as a fifth of global capacity outside China was shut in the last three years even as production through electric arc furnaces increased, said ICICI Securities in an August note.

Shrinking Chinese Steel Exports To Aid HEG’s Margin

Bloomberg –  November 07, 2017

Structural changes in the graphite industry, arising from developments in China, can boost HEG Ltd.’s margins, said Ravi Jhunjhunwala, chairman and managing director at HEG Ltd.

China shut down at least 120-140 million tonne of induction and mini-blast furnaces to crack down on polluting industries. This reduced China’s capacity to export steel and prompted countries such as India, which were net importers , to step up domestic production.

“China was exporting about 120 million tonnes of steel to 200 countries. That’s now likely to drop somewhere in the region of 60-70 million tonnes. That 50 million tonnes which are not being exported is now being produced in countries which were importing.That has added to demand for electrodes.”

Ravi Jhunjhunwala, CMD, HEG